Cities Within Cities: A Spin on the Charter City Model

I had breakfast yesterday with an old friend who is interested in architecture and urban development (and redevelopment). We bounced around an idea related to charter cities, a topic I’ve written about here before (see here and here), but with a twist.

Specifically, we considered how preexisting cities could use something akin to the “charter city” model to promote redevelopment—given that local politics can be as much of a roadblock at the municipal level as at the sovereign level.

Think of it as extreme zoning: A city could charter a specific area (say, a space dominated by shuttered factories). The municipal government could then, essentially, give the area a clean slate from a regulatory perspective (low taxes, incentives to lure businesses and investment). A task force would then work directly with an architecture firm and with potential clients in order to craft a new, business-friendly charter area, perhaps in line with a road-map provided by the city (in terms of desired population density, industry preferences, etc.). In the long-run, such a project might well pay off several times over for the city, given that the boost to GDP and spending would not be confined to the economic zone.

To a degree, this model already exists. Some countries have accomplished a similar end through the construction of special economic zones, though typically the space appropriated for such projects does not come from urban areas. Countries with strict social laws have also formed business zones where those laws do not apply—on a recent trip to the U.A.E., I was impressed by one such zone, the Dubai International Financial Centre.

Could a twist on this model be applied in ailing American industrial cities? Detroit? Pittsburgh?

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I am an associate professor in finance from China, and have strong interests on sovereign wealth fund. I hope I can further my research with your help. It would be appreciated if you could give me a kind reply.

talking point | a mash-up of ideas about markets, countries, and companies, and the quirks of how they all interact

the author | mckinsey consultant based in london | former speechwriter for queen rania of jordan | former economics writer at council on foreign relations | winner of 2009 emmy award | see full profile at LeeHudsonTeslik.com